Question

Suppose real GDP in Puerto Rico is $48 billion and its annual growth rate is 8%. Real GDP for Puerto Rico will double in

A) 6yrs
B)7.5 yrs
C) 8 yrs
D) 8.75 yrs
E) an indeterminate amount of time with info provided

Answer 1

Option D is the correct option,8.75 years

Step-by-step explanation:

Using the rule of 70 which implies that an amount will double when 70 is divided by the required rate:

Number of years an investment doubles=70/annual return rate

For instance,an individual has $40 million at hand and needs to purchase a property that is worth $80 million in the future,the individual can then determine how many years it would be take for the $40 million to double given a specific rate of return on investment.

Specifically,in this case the GDP of $48 million would double in 8.75 years' time (70/8)

Answer 2

Answer: D. 8.75 years

If real GDP in Puerto Rico is $48 billion and its annual growth rate is 8%. Real GDP for Puerto Rico will double in 8 years.

Real GDP will be 82.26 in 6yrs, 88.84 in 8 years and almost double (94.17) in 8.75 years.